Novo Banco to sell €640 million debt portfolio

Novo Banco will offer another bad loan portfolio to investors – this time worth €640 million.

The portfolio called Project Harvey includes 20 big debtor loans according to sources consulted by the online news source Eco.
The portfolio contains the debts of 20 single names, eight company loans and a further 12 loans linked to the real estate sector.
A teaser outlining general information about the portfolio of NPLs will have been sent to investors in recent weeks.
The next step, which is currently underway, is the signing of confidentiality agreements which will allow potential investors to receive more detailed access about the portfolio with the bank providing a virtual data room about the process, supplying the name of debtors and other information to do with the contract.
Only later will the process proceed to the next phase in which offers will be presented until a buyer is chosen.
In recent years banks have been selling off their portfolios of Non-Performing Loans (NPLs) in order to meet European Central Bank regulations to clear bank balances of debt towards the goal of a 5% debt ratio.
Novo Banco is one of the institutions in Portugal that has had a particular problem with NPLs because of the amount of problematic debts it inherited from the failed bank BES.
One of the debt portfolios which has courted the most controversy was Nata II which was sold to the US fund Davidson Kempner at a 90% discount and which contained various loans from big debtors such as Sogema (Moniz da Maia) and Imosteps (ex-Benfica boss Luís Filipe Vieira).